VIPsight - 2nd Edition 2018
COMPANIES
Deutsche Bank AG: Strategic adjustments in its corporate & investment bank (CIB)
After several years of standstill, Deutsche Bank decided to shift more decisively towards more stable revenue sources and to strengthen those core business lines which are most important for its European and multi-national clients. The bank will focus its corporate finance business on industries and segments which either align with its core European client base or link to financing and underwriting products in which it enjoys a leadership position, scale back activities in US rates sales and trading, and undertake a review of its global equities business with the expectation of reducing its platform.
Part of the initiatives are a significant reduction in workforce (in particular as a consequence of the right-sizing of the corporate & investment bank), delayering of management structures across the organization, a rationalization of external spend and real estate footprint worldwide, and increasing efficiency of control systems.
As regards the investment banking, the new CEO Christian Sewing stated in this context: “We are on a good track both in the DWS asset management business and in our private & commercial bank, although we need to substantially improve profitability in both. Our corporate & investment bank is also doing well in some areas and held or gained market share in certain areas. However, we are not strong enough in other areas of this business. Therefore we have to act decisively and to adjust our strategy. There is not time to lose as the current returns for our shareholders are not acceptable.”
Deutsche Bank´s AGM will be held on May 24th, 2018.
Porsche Automobil Holding SE: Won´t get far this way….
In January Porsche moaned about a decision of the Regional Court of Stuttgart. The press release complained that the court deemed the executive board and supervisory board of Porsche to not have sufficiently fulfilled its obligations under Sec. 91 (2) AktG to set up a functioning monitoring system in fiscal 2015 “after the so called diesel issue came to light on 18 September 2015.” And of course the company added that it considers this allegation to be without merit.
In April the prosecutors searched offices of Porsche. The investigation targeted current and former managers over the diesel emission scandal, including suspicions of fraud and misleading advertising. According to the press, the investigation concerns a Porsche board member, another member of the upper management and a third person.
By the way, this time the company did not bother to make a press release, not to mention an ad hoc news…..
METRO AG: Transfer of Real-business in new entity planned
As a consequence of unsuccessful collective bargaining negotiations with the trade union Verdi about a collective bargaining solution, METRO decided to prepare alternative collective bargaining solutions.
Following two years of negotiations with Verdi without any result, METRO created the framework conditions for a new approach to collective agreements, according to the CEO Olaf Koch. The company has therefore started to prepare the prerequisites for a collective agreement outside of the current HDE structure (Association of German Retailers) and intends to utilize its membership in the employers association AHD for that purpose.
Basically, this means a realignment within the METRO Group, including the transfer of the operating business of Real (retail sales) into the Metro Services GmbH. Verdi criticized the move since the remuneration of employees is supposed to be lower in the new entity, and the move would make the business look more attractive in case of a sale at the expense of employees.
Thyssenkrupp AG: Status of the negotiations with Tata
In September 2017 thyssenkrupp informed about the plan to form a joint venture of its European steel activities with Tata Steel Europe. At the time, the partners expected to finalize the negotiations regarding the details of the transaction and the due diligence at the beginning of 2018, when a signing was supposed to complete this process.
In the meantime, the reality of complicated business transactions took its toll. In April, the company made an announcement regarding the progress achieved so far. According to the release, the due diligence of both businesses is almost complete and viable solutions for key issues have been reached. However, Tata Steel is still working to finalize certain arrangements, which is why thysssenkrupp expects that the boards can decide on the joint venture within the first half of the year, rather than at the beginning.